Aabar Holdings v Glencore: the scope of legal advice privilege broadens

According to the classic definition, legal advice privilege protects communications between a client and their lawyer made for the dominant purpose of obtaining legal advice (for example, an email from client to lawyer requesting legal advice). It also protects documents which record or disclose the substance of a protected communication (for example, a client’s note of a call with their lawyer during which advice was imparted). 

Protected communications can be withheld from disclosure to third parties. This means that clients can communicate freely with their lawyers without fear that anyone else will get their hands on their exchanges.

The definition of “client” in this context is, however, narrow. Where the lawyer is instructed by a corporate, only those individuals within the corporate who are specifically tasked with obtaining the relevant legal advice on the corporate’s behalf will be treated as falling within the client group.

This means that communications between the lawyer and any individuals within the corporate who fall outside the client group will not be protected by privilege (unless they disclose the substance of legal advice provided, for example, an email exchange between the lawyer and a member of the business who has not been tasked with obtaining the legal advice but who has been asked to provide the lawyer with information).

It also means that internal communications between individuals within the corporate which do not involve the lawyer will be unprotected, even if the individuals in question are all part of the client group (again, unless they disclose the substance of legal advice provided, for example, an email from one member of the business, who will not be attending an upcoming meeting with the lawyer, to another member of the business, who will be attending, with information or thoughts in advance of the meeting).

As a result of these intricacies, individuals within corporates have always needed to be careful about creating communications relating to legal advice, for fear that those communications will not be protected by privilege and will become disclosable down the track.

A new first instance decision in the Commercial Court, Aabar Holdings S.a.r.L & Ors v Glencore plc & Ors, may, however, drive something of a coach and horses through the classic definition above, and – at least partially – address this issue.

What did Aabar decide?

The judge in Aabar, Mr. Justice Picken, held for the first time that internal communications between members of the client group made for the dominant purpose of obtaining legal advice are protected by legal advice privilege – even if no lawyer is involved in those communications.

This means that intra-client group communications sent to coordinate or in preparation for obtaining legal advice are protected. For example, if a member of the client group who cannot attend a meeting with a lawyer emails another member of the client group with information or thoughts in advance of the meeting, that communication will be protected by privilege.

What should clients do differently?

This is a comforting decision for any corporate instructing a lawyer. It means that the ambit of legal advice privilege is extended to some internal communications within the corporate, regardless of whether there is a lawyer present in those communications. In particular, intra-client group communications sent in the context of coordinating or preparing to obtain legal advice may well now be protected.

It is, however, worth remembering that, even under this decision, the cohort of internal communications which will be protected is very narrow. The communications have to be: 

• Between members of the narrowly defined client group, and 
• For the dominant purpose of obtaining legal advice.  

Communications with other members of the business, or communications which fail the purpose element of the test, will not receive privilege protection.

This decision is also only at first instance and so may yet be overturned on appeal, and/or other courts may simply choose not to follow it.  

At this stage, individuals within corporates should therefore continue to tread carefully when it comes to creating documents relating to legal advice. If intra-client group communications are created, there will now be a good argument that those communications are protected by legal advice privilege. However, that argument will not necessarily be watertight and so for now, prudence remains the watchword when it comes to internal document creation in this context.

Our team are on hand to support you with any actual or potential dispute, whether in the form of a litigation, arbitration or investigation - please get in touch with any of our team to discuss the issues raised above or any other needs.

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